I Want to Invest—But How Much, and What Do I Buy?

Dear Christin,

I am a working class person who is gaining knowledge about Index Fund and S&P 500. I have an additional $ 2,000 and I would like to invest. what would you suggest? In addition, I am interested in bitcoin. Can I invest $ 100? Is Edward Jones a good place to start financial transactions?

sincerely,

Paula

Dear Paula,

I am glad that you decided to start making money by investing! This is a long -term journey, so the first thing is that when it comes to investment, your feelings have to take into account your feelings. Just because the market is down, it does not mean that you should leave, and just because the markets are up. This does not mean that you can relax.

He said, how do you start? First of all, you have to open a brokerage account. You have mentioned Edward Jones, but the best brokerage depends on you and what kind of investment you want to invest. Take a look at our list of best investment apps for your research.

You have mentioned the index funds and with the exchange-traded funds (ETF), these are great places to begin for a start. So how do they work? Index Funds Track Market Index – S&P500 (an index of 500 largest companies in the United States) – and try to mimic the performance of the index. A exchange-traded funds are sometimes a subject, or a basket of industry-based companies. For example, if you want to invest in the technology sector overall, you can buy a technology ETF shares. That ETF will shares from all types of technology companies within it.

The advantage is that your risk is spread between all shares or securities inside the fund, so even though a company or property is not doing good, the entire fund is promoted by the rest of the assets in the collection. negative side? Like your risk, your returns are also spread. So if the stock of a company for the year is 50%, then your profit will be powered by another property which can only be 5% returns. But index funds and ETFs are quite simple and do not need to learn much about a specific company or property. They are a great place for a start to start investing.

I’m not a stock picker, so I will not tell you Who To choose index funds or ETFs, but I like to say to invest in what you know. In this way, you will be more familiar with companies, trends and headlines that are affecting an area or industry in which you decide to invest. If you are a fond chawla traveler, consider travel-based ETFs. If you believe in the strength of the American economy, then invest in S&P 500 index. On our website, you can research the top index funds and the best ETF.

You have asked about bitcoin, and when I would not ask you to ignore cryptocurrency in my portfolio, I would advise the basic understanding of bitcoin and difference between other coins, as this is such a risky property. Cryptocurrency is notorious unstable, and from last year, the price of bitcoin has exceeded 66%.

But no matter what you decide to invest, be consistent, and try to invest the same amount on the same investment, on the same investment, every month. It is called dollar-cost average and if you do this, over time, it does not matter whether the markets are up or down that day. How much you choose to invest depends on you and your finance, but since you are trying to build money, invest as much as your budget allows, while still separating money for savings, paying your bills and paying any other expenses.

-Karistin

If you have questions about money, Christin is here to help. Present an anonymous question and it can answer it in the future column.